Correlation Between Alm Brand and Matas AS
Can any of the company-specific risk be diversified away by investing in both Alm Brand and Matas AS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Alm Brand and Matas AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alm Brand and Matas AS, you can compare the effects of market volatilities on Alm Brand and Matas AS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Alm Brand with a short position of Matas AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alm Brand and Matas AS.
Diversification Opportunities for Alm Brand and Matas AS
Weak diversification
The 3 months correlation between Alm and Matas is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Alm Brand and Matas AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matas AS and Alm Brand is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Alm Brand are associated (or correlated) with Matas AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matas AS has no effect on the direction of Alm Brand i.e., Alm Brand and Matas AS go up and down completely randomly.
Pair Corralation between Alm Brand and Matas AS
Assuming the 90 days trading horizon Alm Brand is expected to under-perform the Matas AS. But the stock apears to be less risky and, when comparing its historical volatility, Alm Brand is 1.7 times less risky than Matas AS. The stock trades about -0.03 of its potential returns per unit of risk. The Matas AS is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 12,520 in Matas AS on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Matas AS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alm Brand vs. Matas AS
Performance |
| Timeline |
| Alm Brand |
| Matas AS |
Alm Brand and Matas AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alm Brand and Matas AS
The main advantage of trading using opposite Alm Brand and Matas AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alm Brand position performs unexpectedly, Matas AS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Matas AS will offset losses from the drop in Matas AS's long position.| Alm Brand vs. Dataproces Group AS | Alm Brand vs. cBrain AS | Alm Brand vs. ALK Abell AS | Alm Brand vs. ChemoMetec AS |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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